Investment Management

We manage separate accounts for high-net worth individuals and institutions. We specialize in investing in companies with market capitalizations under $4 billion across the globe where market inefficiencies are more likely found. Each client has access to view their account for full transparency. Clients are able to add to and close their accounts at any time, but we prefer working with clients willing to keep their money invested 5 years and beyond.

Fees

We offer two different ways for clients to pay a fee. A flat fee based on assets under management or a performance fee.

Accredited investors have the choice between paying the flat annual management fee (paid quarterly) or a yearly performance fee. Individuals who are not considered accredited investors (according to Rule 501 of Regulation D) are only allowed to pay the flat annual management fee.

The flat annual management fee are as follows:

  • 1% on assets up to $500,000 (0.25% per quarter)
  • 0.8% on assets above $500,000 but below $1,000,000 (0.2% per quarter)
  • 0.6% for assets above $1,000,000 (0.15% per quarter)

We are long-term investors, so our performance fee is set to incentive us to be successful long-term investors. Accredited clients pay 0% in annual management fees during the year, and a 25% performance fee based on capital appreciation. The performance fee follows the “high water mark” which means when your portfolio rises in value, you’ll pay 25% on that increase in value, but if your portfolio drops in value, you will not incur a new performance fee until the portfolio hits the last highest value, adjusted for withdrawals and deposits. Before we can earn our 25% fee we must achieve a 6% annual hurdle rate. Any deficiencies in earnings below the 6% hurdle rate will be carried forward against future earnings, but will not be carried back.

Frequently Asked Questions

What strategies do you employ?

Our main focus is on buying stock in companies with capitalizations below $4 billion. We rarely if ever utilize leverage or sell short a company’s shares with the intention of profiting from the depreciation in the market price of the security. Our portfolios are heavily concentrated on our best ideas, so there are generally 10 – 15 investments in our portfolios at one time.

What is the required amount to invest?

We prefer accounts over $100,000 but are flexible with interested parties who find our philosophy logical.

How are fees paid?

Asset-based portfolio management fees are withdrawn directly from the client’s accounts with the client’s written authorization on a quarterly basis. Fees are paid in advance.

Performance-based portfolio management fees are withdrawn directly from the client’s accounts with client’s written authorization on an annual basis. Fees are paid in arrears.

Do you have full investment authority over my account?

Yes, clients sign a discretionary agreement giving Unconventional Capital Wisdom, LLC the ability to make investment decisions on your behalf.  We do not have the authority to take money out of your account, unless to deduct the agreed upon fee.

Who are Accredited Investors?

Accredited investors are –

  1. a bank, insurance company, registered investment company, business development company, or small business investment company;
  2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
  3. a charitable organization, corporation, or partnership with assets exceeding $5 million;
  4. a director, executive officer, or general partner of the company selling the securities;
  5. a business in which all the equity owners are accredited investors;
  6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
  7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
  8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
Are you fully invested at all times?

No, it depends on the opportunities available. If the market is extremely positive and individuals are buying in droves chasing returns, we might find only a very few number of above average companies selling for below average prices. We could have more cash in that situation. On the flip side, if the market is extremely negative and people are fleeing in droves, we might find many above average companies selling for below average prices. These times we could have less cash.

I'm interested, what next?

Contact us and we will set up a physical or phone meeting. At that time, we will make sure you understand our philosophy and would be a good fit. If a good fit, we will sign the discretionary agreement and other account forms. We will also give you the appropriate registration disclosures of our firm. Once a custodial account is opened and money or assets have been transferred, we will work diligently to invest your money wisely.

Our ADV brochure can be found here.